This is Part II of a two-part series on moving from a strategic planning to strategic management process. Rob Jackson is a Senior Consultant with Community IT Innovators.
Strategic management is a logical set of connected activities that enables the organization to make its strategy work. It is a process. It is not the result of a single decision or action. It is the result of a series of integrated decisions or actions that get measured over time.
For the purposes of this discussion, strategic management includes:
- Strategic planning
- Budgeting
- Performance management
- Strategic measurement
- Evaluation
Information Technology (IT) should have a role in all of these functions, and below we explain IT’s role in the strategic management process:
Strategic Planning
While IT professionals are not strategic planners, per se, IT professionals should be members of the strategic planning team and serve as technical resources during strategy formulation. Business strategies must be translated into short term operating objectives, data must be collected and aggregated for analysis against the plan, and eventually IT will be called upon to develop the systems that will institutionalize new attitudes and automate new patterns of behavior within the organization’s information systems.
Budgeting
To realize IT value, nonprofit organization should develop an IT budget with a three to four year horizon. It should include a list of all recurring IT costs related to Personnel, Contractors, Software, Hardware, Data and Telecommunications, as well as any re-occurring costs associated with maintaining the organizations IT portfolio.
The IT budget should be developed holistically with the expected funding levels from all departments, the organization’s calendar, the sequence of projects and respective timelines, and be mapped to the organization’s operational objectives. The organization’s leadership should look for common costs, reduce unnecessary expenses and work collaboratively with the IT staff to align the IT budget with the organization’s strategy.
Performance Measurement
From an IT perspective, performance measurement systems can provide a convenient and expedient method for organizations to summarize and report on critical measures for organizational success, but it is only a piece of the strategic management process. Performance management works to:
- Manage the implementation of agreed upon strategies
- Assess the performance of those strategies
- Reconcile inconsistencies and misalignments
- Formulate new and revised strategies
Strategic Measurement
Similarly, strategic measurement systems can facilitate the collection key performance data, but it is only a piece of the strategic management process. From an IT perspective, it differs from performance management because it:
- Continuously monitors the fit between the organization and the environment
- Tracks external trends and forces that are likely to affect the organization
- Develops information flows that shape internal and external communication
- Provides a clear vision for the type of organization the organization is striving to become
- Creates strategic agendas at various levels, and in all parts of the organization to ensure they become the driving force in all other decision making
- Guides the other management processes in an integrated manner to support and enhance these strategic agendas
Evaluation
From an evaluation perspective, IT must be involved in the process that identifies inputs and codifies all of the observable and measurable targets to ensure data quality. IT can also be used to help the organization track changes in value, condition and status regardless of the type of evaluation being employed.
In conclusion, the successful management of any organization’s strategy depends on the design, use and alignment of these functions to achieve the desired result. So, coordinating workflows, transferring relevant knowledge effectively from one part of the organization to another and achieving integration so as to meet organizational objectives are all ingredients for successful strategic management that can be achieved by using IT strategically.